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30 Jul 2008
The market is deceptively balanced at the week's start, excepting the unbalanced dropping of the round trips in both hemispheres, though the market did move slightly toward charterers' favour on Friday as business came to a near halt. It will be a matter of renewed demand for levels to turn around. Some traders say that any rebound in demand will have to be strong to hold spot rates at last-done. The week also started with relatively little movement with Capes locked in neutral as only big charterers like
BHP and Noble take out some Australian rounds at rates discounted some
US$ 1-2,000 to last-done. Voyages of Pacific ore are at the forefront
with Classic Maritime dropping the line to US$ 29/t Oz/China. On
Wednesday the Capes keep holding up on firm period business. It doesn't
hurt that avails are not widening or that the Pacific min¬eral trades
have remained surprisingly tonnage hungry. Despite the biggish jumps in
Pacific rounds and Med back haul from the Pac (both routes up by 2%)
the Atlantic is troubling owners with its calm. Rates stay reasonably
firm on positive forward sentiment, even rising on the Richards Bay to
UKC trips and back hauls from Far East to UKC at mid-week. The BCI over
the week makes no progress, up or down, finishing only 13 points up
since Monday at the level of 13,404.
Short period business, Atlantic Panamax traders tell BMTI, is almost
the only real support to sentiment for the Panamaxes at the end of the
week, though even they have been drifting with losses of US$ 2-3,000 on
average compared to similar business fixed in the previous week. South
American grains to China are getting fixed in the middle US$ 80,000s
daily on modern tonnage, whereas they might have been getting high US$
80,000s daily late the week before. A good number of shipowners have
already resigned themselves to a sluggish summer, though there is
always the post-Olympic China rebound to look forward to, and. South
America still offers great hope, owners say. On Thursday Panamaxes are
doing well enough on a mini-flurry of longer period business being
fixed in the Atlantic with four and five-year periods getting done at
solid rates in the mid-US$ 50,000s daily. Nonetheless, the wider trend
remains mildy negative with the BPI shedding 10% over the five-day
period to land at 7,754.
Handy markets start sluggish into the week, albeit with some
respectable period business like the dollar-to-dwt 3-5 months fixed on
the 2008-built, 56,000-tonner "Lara" for US$ 55,000 daily. The Atlantic
goes back into stasis with South America still a question mark and
Richards Bay not giving the impetus some had expected. Avails in the
Pacific are swelling amid insufficient demand to pick up the slack.
Handysize indices are still largely stable as even the ex-Recalada
route to UKC (HS3) is mildly positive. Supramaxes, on the other hand,
are in a downturn seen most sharply in the Australian rounds as well as
the USG/UKC trips. The already embattled US Gulf is burdened with more
delays after a chemical tanker spill on the Mississippi River last week
left transport stalled from New Orleans. Local traders tell BMTI a
number of potential loaders have been forced to ballast to South
America as ex-USG traffic may be deadlocked through much of this week.
This is not good news for area owners watching trips from the area fall
by at least US$ 2,000 by the day now. Likewise, the rush of tonnage to
SA waters is likely to pressure the ex-Brazil market as avails build.
Brokers say front haul trips ex-Brazil on modern Supramaxes are already
being set in the high US$ 60,000s, well down from the lower-US$ 70,000s
seen last week. Still, the Indian Ocean redelivery maintains its power
to produce a robust fixture from the Atlantic basin as exhibited on the
1998-built, 46,747 dwt "Ken" taken USG/India at US$ 82,000.
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Source: BMTI
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